In two Florida cities, half of all home buyers pay with cash

Photo byRalph (Ravi) KaydenonUnsplash

In the early days of the pandemic, about 20% of homebuyers bought their new house with cash (defined as having no mortgage information on the deed). Cut to October 2022, and that figure has increased to a whopping 31.9%, close to one-third.

That's higher than it has been since 2014, and the reason is clear. Through the pandemic, the housing market was extremely hot in many areas. Potential buyers made cash offers to gain an advantage over other buyers. Cash offers are easier as they are not contingent on getting approved for a mortgage. They are also more lucrative as they come with no closing costs.

These days, the housing market has cooled down somewhat from its pandemic highs, yet the proportion who are paying in cash is increasing. That's due to higher mortgage rates - buyers who can purchase with cash are doing so to avoid interest payments.

According to this report by Redfin, all-cash purchases were most common in Florida in October 2022. Their take on why is simple: "Florida is home to a lot of affluent buyers with the ability to finance home purchases with all cash."

Which Florida homebuyers are most likely to purchase with cash?

Incredibly, there are two cities where almost half of all homebuyers purchased with cash - the highest rates in the country.

These are Jacksonville (49.7%) and West Palm Beach (48.6%). The next highest markets are both in Ohio (Cleveland and Cincinnati) where housing is much more affordable.

For context, the median listing home price in Jacksonville is $299.900 and in West Palm Beach it's $435,000.

If buying houses with cash isn't within your reach, don't feel bad. It comes with a significant pitfall - cash can be short if the home needs unexpected repairs or renovations and you could be left with far less money to invest in a more diversified portfolio.